HMRC

Emily_Joy
Emily_Joy Posts: 1,161
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edited 27 December 2023 at 4:59PM in Savings & investments
I am trying to work out the math to make sure that the interest on savings after taxes is more than the interest we pay on mortgage. I also don't want to make any expensive mistakes. I am a base rate tax payer and the OH is high rate tax payer starting from this year. While the interest rates were low, we were well within the personal saving allowance. I imagine this is about to change. I think the questions are: 
1. Is it our responsibility to declare all our income from savings to HMRC or do we wait for HMRC to approach us? If we have to declare ourselves, what is the deadline for this?
2. Do I get it right that we pay tax on everything above the personal saving allowance which is not in ISA?
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  • Audaxer
    Audaxer Posts: 3,491
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    edited 27 December 2023 at 4:10PM
    1. I understand HMRC get that interest paid info from the banks and will adjust your tax codes accordingly.
    2. As you are a Basic rate taxpayer you get £1,000 personal savings allowance and your OH would have a personal savings allowance of £500, so interest over these amounts not in ISAs should be taxed. 
  • Hoenir
    Hoenir Posts: 1,254
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    edited 27 December 2023 at 4:17PM
    Do you have a personal tax account set up ?  Very easy to provide the information yourselves. Not all financial institutions report the data as yet. Onus is on you to self declare. Rather than assume the HMRC will get it right. 
  • masonic
    masonic Posts: 22,888
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    It is your responsibility to make sure HMRC are aware of any income that would create a tax liability. In practice if you don't fill out a tax return, it's easiest to let HMRC have a first run at the tax calculation, but check that they get it right and run through the figures with them if anything looks wrong.
  • Emily_Joy
    Emily_Joy Posts: 1,161
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    edited 27 December 2023 at 4:58PM
    No, I don't have a personal tax account. I am also wondering whether "Reward payments" from Halifax/Natwest/Royal Bank of Scotland count as interest?
  • masonic
    masonic Posts: 22,888
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    edited 27 December 2023 at 4:49PM
    Emily_Joy said:
    No, I don't have personal tax account. I am also wondering whether "Reward payments" from Halifax/Natwest/Royal Bank of Scotland count as interest?
    No they do not count as interest. In some cases they are considered cashback and not taxable, in others they are considered annual payments and taxable as other income (but basic rate tax is deducted at source if this applies).
  • Emily_Joy
    Emily_Joy Posts: 1,161
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    edited 27 December 2023 at 5:18PM
    masonic said:
    It is your responsibility to make sure HMRC are aware of any income that would create a tax liability. In practice if you don't fill out a tax return, it's easiest to let HMRC have a first run at the tax calculation, but check that they get it right and run through the figures with them if anything looks wrong.
    If I received some income in a EU country (Germany) and the tax was deducted before the funds reached my account, do I still need to declare this to HMRC?

  • masonic
    masonic Posts: 22,888
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    edited 27 December 2023 at 5:29PM
    Emily_Joy said:
    masonic said:
    It is your responsibility to make sure HMRC are aware of any income that would create a tax liability. In practice if you don't fill out a tax return, it's easiest to let HMRC have a first run at the tax calculation, but check that they get it right and run through the figures with them if anything looks wrong.
    If I received some income in a EU country (Germany) and the tax was deducted before the funds reached my account, do I still need to declare this to HMRC?
    Presumably this was German withholding tax that is applied to income from property investments (if memory serves me correctly). You potentially need to declare foreign income from overseas investments you hold while resident in the UK, yes. You'd need to check whether this is covered by a double taxation treaty and can therefore be counted towards any UK liability you may have. If tax needs to be paid then that would normally mean registering for self-assessment and a requirement to declare all of your income. There was a thread on the subject of German WHT a while back and I remember it being complicated!
  • Emily_Joy
    Emily_Joy Posts: 1,161
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    masonic said:
    Emily_Joy said:
    masonic said:
    It is your responsibility to make sure HMRC are aware of any income that would create a tax liability. In practice if you don't fill out a tax return, it's easiest to let HMRC have a first run at the tax calculation, but check that they get it right and run through the figures with them if anything looks wrong.
    If I received some income in a EU country (Germany) and the tax was deducted before the funds reached my account, do I still need to declare this to HMRC?
    Presumably this was German withholding tax that is applied to income from property investments (if memory serves me correctly). You potentially need to declare foreign income from overseas investments you hold while resident in the UK, yes. You'd need to check whether this is covered by a double taxation treaty and can therefore be counted towards any UK liability you may have. There was a thread on this subject a while back and I remember it being complicated!
    Nope. I don't have property investments. I was invited to participate in a hiring committee as an external advisor and the payment in question covered associated expenses and had a small premium.

  • masonic
    masonic Posts: 22,888
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    edited 27 December 2023 at 5:35PM
    Emily_Joy said:
    masonic said:
    Emily_Joy said:
    masonic said:
    It is your responsibility to make sure HMRC are aware of any income that would create a tax liability. In practice if you don't fill out a tax return, it's easiest to let HMRC have a first run at the tax calculation, but check that they get it right and run through the figures with them if anything looks wrong.
    If I received some income in a EU country (Germany) and the tax was deducted before the funds reached my account, do I still need to declare this to HMRC?
    Presumably this was German withholding tax that is applied to income from property investments (if memory serves me correctly). You potentially need to declare foreign income from overseas investments you hold while resident in the UK, yes. You'd need to check whether this is covered by a double taxation treaty and can therefore be counted towards any UK liability you may have. There was a thread on this subject a while back and I remember it being complicated!
    Nope. I don't have property investments. I was invited to participate in a hiring committee as an external advisor and the payment in question covered associated expenses and had a small premium.
    Was the premium less than £1000? If so, it could probably be included within the trading allowance we all get from HMRC and would not need to be declared, see: https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#trade
  • Emily_Joy
    Emily_Joy Posts: 1,161
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    edited 27 December 2023 at 5:48PM

    masonic said:
    Was the premium less than £1000?
    Yes, it was less than £1000. Looking at the paperwork, they seem to list it as "per diem"..
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